Patrick Smith v. Glenn Schmalhofer

IN THE COURT OF COMMON PLEAS FOR THE STATE OF DELAWARE IN AND FOR NEW CASTLE C()UNTY PATRICK SMITH, ) ) Plaiiitiff, ) ) v. ) C.A. Nos. CPU4-l3~003{)l8 ) CPU¢l-l3-0()3{}99 GLENN SCHMALH()FER, ) Consolz`dated Tr'z`al ) Defendant. ) ) Submitted: September 10, 2014 Decided: October 1, 2014 Gary L. Smith, Esquire Michael P. Morton, Esquire 1400 Peoples Plaza, Suite l 10 1203 North Orange Street Newarl<, DE 19702 Wilniingtoii, DE 198()1 Al'f'orneyfor Plairzlzjj" Arlor‘ney_for Dejéncz’czizt MEM{)RANDUM OPINION ANI) ()RDER ()N DEFENDAN'I"S M()'I`I()N FOR I)IRECTED VERDICT PURSUANT TO C.C.P. CIV. R. 50(:1)(1) Trial in the above captioned inatter took place on Tuesday, September 10, 2014. The instant matter is an appeal de novo brought pursuant to 10 Del C. § 9571 from the Justice of the Peace Court. This is a landlord-tenant action filed by Plaiiitiff Patriel< Smitli ("l\/lr. Smith"), who is seeking double damages of a security deposit pursuant to 25 Del C. § 5514(£) and (g). At the close of Plaintift’ s case, Defendant Glenn Schmalhofer ("Mr. Schmalhofer”) moved for dismissal under Courl Qf(,`onz)non Pleas Cit». R. 41 (b). After consulting with counsel at trial, the Coui't determined that it will decide the motion under Courl' of Comrnon Fleas‘ C`iv. R. 50(¢1)(]) and its applicable standard The Court reserved decision on the motion. 'l"his is the Cotirt’s Final Decision and Order. FACTU`AL AND I’ROCEDURAL POS'I`URE On September' 4, 2013, the justice of the Peace Court entered judgment in favor of Mr. Smith and against l\/lr. Schmalhofer in the amount of $682.73, plus costs and interest.l Mr. Smith and Mr. Schmalhofer filed separate cross appeals in this Court, but by the parties’ stipulation, the Court consolidated the two cases into one appeal.z On October l, 2013, Mr. Schmalhofer filed a Motion to Stay Execution, and posted a superseadas bond in the amount of $722.18, and on Oetober 4, 2013, the Court granted Mr. Schmalhofer’s motion. On November 18, 201, Mr. Smith filed the Complaint on Appeal. ln the Complaint, l\/l`r. Srnith alleged that the parties entered into a lease agreement ("Lease Agreernent") whereby Mr. Smith and two other tenants rented a property located at 85 West Park Place, Newark, DE 1971 l ("the Property") for a term beginning june 30, 2011 and ending May 3(), 2012.3 Mr. Smith averred that he and the other tenants vacated the Property on l\/Iay 30, 2()12, and that upon the request of Mr. Schmalhofer, left the keys as well as a forwarding address at the Property. Mr. Sniith claimed that Mr. Schmalhofer failed to comply with 25 Del. C. § 55]4 because he did not remit the security deposit within twenty days of the expiration or termination of the rental agreement, and that as a result, Mr. Schnialliofer is liable for double the amount of the security deposit Finally, l\/lr. Srnith averred that the rental agreement between the parties contains three provisions that are prohibited be the landlord-tenant code. On December 6, 2013, Defendant filed an Answer, admitting to entering a rental agreement with l‘\/lr. Smith, but denying the other allegations in the Complaint Specitically, Defendant claimed that he was unaware of the date on which l\/lr. Smith vacated the Property. l On Septeinher 6, 2013, l\/Ir. Sch:nalliofei' filed a motion for reargument, which the justice of the Peace Court denied on Septeinher 18, 201 3. 2 The Clerl< of the Court opened two separate files when each party cross~appealed; however, the Complaint for both appeals was identical. 3 Mr. Sniith is the only tenant who appealed to this Court. [2] He further maintained that l\/lr. Smith failed to return the keys to the Property and failed to provide a forwarding address. Additionally, Defendant averred that on June 20, 2012, he iiiailed the check and itemized list of deductions from the security deposit to l\/lr. Smith. At trial on September 10, 2014, l\/lr. Smith was duly sworn and testified during his casein-chief. l\/lr. Smith testified that prior to the termination of the lease, he received einails from l\/lr. Schmalhofer, which instructed the tenants to leave the keys to the Property on the kitchen table when vacating the Property." l\/lr. Smith also testified that while he was moving out on May 30, 2012, he contacted Mr. Schnialhofer, who caine to the Property and inspected it, stating that, "the place looked good." l\/lr. Smith testified that at that tirne, when Mr. Smith attempted to provide l\/lr. Schniaihofer with a forwarding address, l\/lr. Schrnalliofei' indicated that he would be "running around a lot" that day, and instead, asked i\/ir. Smith to give him the address later. Mr. Smith also testified that on June 21, 2012, he received a check for $l,875.27 as well as an itemized list of deductions that Mr. Schmalhofer withheld from the security deposit due to a number of damages to the Property. Mr. Smith stated that with the exception of the deduction for the water bill, the other deductions l\/lr. Schmalhofer accounted for are inappropriate, as neither he nor the other tenants caused the damages contained within the list. Finally, l\/li'. Smith 4 After trial, the Couit received the following relevant items into evidence; P!airrl_ifj`”’.s' Ex!iibir l - the Lease Agreeineiit, as signed and initialed by i\/Ir. Sn'iitli and M`r. Scliina|liofer. P!ai`riti'ji’s Exfri'bi‘l 2 -» a copy of the security deposit deductions for the Property as well as the accompanying security deposit check for $i ,865.27 and its corresponding envelope, post-niarked June 2}, 2012. Pfaz`riiijf’s' Exhz'!)it 3 m Mr. Smith’s letter to Mr. Sclirnalliofer dated .1 une 26, 2012, disputing the security deposit amount and stating that Mr. Schinalliofer failed to timely provide the itemized list of damages and deduction as required by 25 Del. C. § 5514(1°). Piai`nti`jf’.s' Exhi`bir 5, 7, 8 m l\/lr. Scliinalhofer’s standard, boilerpiate eniaiis to Mr. Smith, dated l\/larcli 31, 2012, May 20, 2012, and l\/lay 24, 2012, respectiveiy, reininding Mr. Smith, inter ciiz`a, that his Lease Agreenient terminated on May 30, 20 t 2; that the Property should be in the same, or substantially the same condition in which he found it; that keys to the Property were to be leli on the kitchen countertop, and; that Mr. Smith must provide Mr. Schinalliofer with a forwarding address in writing, sent by regular mail or e-mail. P/ai`nli`ff’s Exhz'bz`i 6 »~ an einai1 from Mr. Smith to l\/lr. Sciiinalliofer, dated May 20, 2012, requesting that he be perniitted to move out by i\/Iay 31, 2012 instead of May 30, 2012. Deferzdanr’s Exhfbfr C - a copy of both sides of the security deposit check issued to Mr. Smith. testified that he sent l\/lr. Schmaihofer a fetter on June 26, 2012, disputing the security deposit, indicating that it was not refunded within the time required, and demanding the full amount of the security deposit be refunded Mr. Schmalhofer never responded to l\/lr. Smith’s letter. On cross~exarnination, l\/lr. Smith testified that the Delaware Landlord-'l`enant Code applies to the Lease Agreement. l\/loreover, l'\/.[r. Smith also testified that the Lease Agreement provides P.O. Box 5604, Newark, DE 19714-5604 as the appropriate address for which legal service should be made upon l\/lr. Schmalhofer, but that he never sent any correspondence to that specified address.§ Finally, I\/lr. Smith testified that he endorsed and cashed the security deposit check from l\/lr. Schmalhofer, but maintained that he cashed the check only after he disputed it.6 l\/Ir. Scliiiialhofer was then duly sworn and testified during Plaintiff’ s case-in-chief. First, l\/lr. Schmalhofer testified about the Lease Agreenient. Mr. Schrnalhofer indicated that lie was the sole owner and manager of the Property.l l\/Ir. Schmalhofer also testified that while the P.O. Box in Newark listed is the appropriate address for which legal service can be rnade, it is not the physical address of his office; l\/ir. Schmalhofer maintained however, that the P.O. Box in l\lewark is the only address to be used for mailing purposes. l\/lr. Schinalhofer then testified about the emails sent to l\/lr. Smith prior to his moving out of the Property, stating that the emails were "standard boilerplate notices" sent as a reminder to tenants that their lease was soon expiring Mr. Schmalhofer also testified to the forwarding address requirement and indicated that as long as it was iii writing, he would accept a forwarding 5 See Plaiiitiff`s Exhibit 1 at p. lO, ‘ll ‘°Identity of Maiiager." 6 See Defendant’s Exliibit C; Plaiiitiff” s Exhibit 2. 7 Altliougli the Lease Agreeineiit lists Salvatore l\/lannio under the Provisioii entitled "ldeiitity of Manager," Mr. Sclimalhofer testified that l\/lr. Mannio is his pluinber, and that he lists his contact information in case of einergeiicies. address in any way, including an eniail or text message l\/Ir. Schmalliofer testified that he did not receive a forwarding address Mr. Schnialhofer also testified about the condition of the house at the end of l\/lr. Smith’s rental pei'iod. l\/lr. Schnialhofer testified that while there were some items left in the house when l\/lr. Sinith took possession of the Property, he did not believe that such items included a pool table or ping~pong table that were found in the basement upon l\/lr. Srnith’s moving out. Mr. Schmalhofer also testified that he remembered inspecting the house with l\/lr. Smith while Mr. Smith was moving He then testified that from l\/lay 30, 2012, until June 3, 2012, he saw debris on the Property. At the close of Plaintiff’s case-in-chief, the defense moved for a dismissal on the grounds that Mr. Smith had failed to meet his burden in proving his case. Before counsel proceeded with the Motion, the Court consulted with both parties’ counsel, and per the parties’ stipulation, determined that it will decide the motion under Coarl of Common Fleas Cz`ii. R. 50(¢1)(]) and its applicable standard On l\/lr. Schmalhofer’s Motion for Directed Verdict, defense argued: (1) there was no evidence indicating that Mr. Smith paid the security d.eposit; (2) there was no evidence that l\/lr. Smith had authority from the other tenants involved in the case below to appeal the case in this Court; (3) there was no evidence indicating that l\/Ir. Smith had the right to cash the security deposit check; (4) there was no evidence of l\/Ir. Smith’s actual forwarding address', (5) there was no evidence of any specific statutory provisions of the Delaware Laiidlord~"l`enaiit Code that l\/lr. Schinalhofer violated; (6) the amount of money owed to Mr. Smith had not been established; (7) that Delaware’s Landlord-'l`enarit Code adheres to specific methodology which Mr. Smith has not referenced; (8) that 25 Del. C. § 5113 explicitly requires that the notice of forwarding address must be in writing and properly served, and; (9) that 25 Dei'. C. § 55 l¢l(h) provides that a failure to supply the landlord with a forwarding address relieves the landlord of liability for double the amount of the security deposit. ln responding to the motion, l\/lr. Smith’s counsel contended that Plaintiff has met his burden, arguing that the security deposit amount is located within the documents stipulated into evidence. While l\/lr. Smith’s counsel conceded the deduction of $276.32 for the water biil, he argued that the other deductions should be refunded, as the damages were not caused by Mr. Smith. Mr. Sinith’s counsel also argued that pursuant to § 51 13, the Lease Agreement does not list the usual business address as required, which "severely restricted" the way in which l\/Ir. Smith was able to serve the forwarding address to l\/lr. Schmalhofer. Additionally, counsel argued that under § 5Il3(b), l\/lr. Smith was permitted to supply Mr. Schmalhofer with his forwarding address by either personally serving him or otherwise as provided by l\/ls. Sclialhof`er, and that in this instance, l\/lr. Schmalhofer told l\/lr. Smith to leave both the keys and the forwarding address on the counter. LEGAL STANDARD Couri' ofCommc)n Pleas Ci`vi`l Rule §O(a) provides that: A party who moves for a directed verdict at the close of the evidence offered by an opponent may offer evidence iii the event the motion is not granted, without having reserved the right to do so and to the same extent as if the motion had not been made. A motion for a directed verdict shali state the specific grounds therefore. When considering a l\/lotion for a Directed Verdict, the Court must consider all evidence in the light most favorable to the non-moving party.g To find in favor of the moving defendant, 8 Wii's'r)n v. Ki.'af)e Con.s'f. Co., 2003 WL 22931390 at * 2 (Del. Com. Pl. July 22, 2003);11/100¢{3) v. Naii'onii>ic)'e Miili,icil In.s'. Co., 549 A.2d 291 , 293 (Del.l988). [6] the Court must be convinced that there is no substantial evidence to support a verdict for the nonmoving plaintiff.g I)ISCUSSION A. Under 25 Del. C. § 5514 et seq., Mr. Smith failed to meet his burden in proving that he is entitled to damages in the amount of double the security deposit. The Delaware Laiidlord-'l`enaiit Code governs the instant dispute between the parties. Specifically, pursuant to 25 Dei. C. § 5514 et seq., a landlord must provide tenants with an itemized list of damages within twenty days after the termination or expiration of the lease. lf a landlord fails to meet this requirement, then § 55l4(g) allows the tenant to recover double the amount of the security deposit.'° However, under § 55l4(h), if the tenant fails to provide the landlord with a forwarding address at the time of or prior to the termination of the lease, the landlord will be "absolved of the liability for double damages."l] When a tenant fails to provide the iaiidlord with a forwarding address, the landlord is relieved from such liability because it is "incumbent on the tenant to notify the landlord prior to the lease’s termination. The tenant is the one moving and in order for the landlord to be able to comply with its duties, [the landlord] must know where the tenant can be found after leaving the rental unit."]z Based on the evidence produced at trial, the Court finds that l\/lr. Smith has proven by a preponderance of the evidence that l\/Ir. Schmalhofer failed to remit an itemized list of damages within twenty days of the termination of the Lease Agreement, as required by 25 Del. C. § 55l4(f). Pursuant to the Lease Agreement, Mr. Smith’s rental period terminated on May 30, `)él/i'c€ar'lhy v. Mayor of Wi`lriiiiigi‘ori, 100 A2d 739, 740 (Del. Super. 1953). ‘ cite " ai~@aawai~e¢~ v. sargent 2013 i, ;64032 ar a 2 (D@i. c@in. Pi. ira is, 2013). '2 nail-age ~i»_ Baai@¢i, 2013 WL 35207 ai a 2 (i)ei. coat Pi. Jan. s, 2013) airing carras- Ofriaagriiiai, iac., 1999 WL 1240347 , ar *6 (i)@i. super o@i. 26, 1999) 2012, thereby establishing June ]9, 2012 as the statutory time limit in which Mr. Scliinaihofer could remit the itemized list of damages to Mr. Smith. The record reflects that the fist of itemized damages, which was also sent with l\/Ir. Smith’s security deposit eheck, was postmarked June 21, 2012. Thus, Mr. Schmalhot`ei' did not meet the requirements of § 5514(1‘). Mr. Schrnalhofer argues that l\/Ir. Smith did not provide him with a forwarding address, as required by the Lease Agreeineiit and 25 Def. C. § 55 l4(h). In his response to the motion for directed verdict, Mr. Smith’s counsel argued that l\/.[r. Smith provided l‘\/lr. Sehrnalhofei' with his forwarding address by leaving it on the kitchen counter, as requested by Mr. Schmalhofer. This, however, is refuted by Mr. Smith’s own testimony On direct examination, Mr. Smith testified that he atlserrzplsed to provide Mr. Schmalhofer with a forwarding address, but that Mr. Schrnalhofer indicated that he would be "running around a lot" that day, and iristead, asked Mr. Smith to provide him the address later. Mr. Schmalhofer also testified that he did not receive a forwarding address from Mr. Smith at or prior to the termination of the Lease Agreement. Moreover, the emails sent to Mr. Smith by Mr. Schmalhofer, as well as the Lease Agreement itself, both instruct tenants to provide their forwarding address in writing by regular mail or ernail. This Court fmds, by a preponderance of the evidence that Mr. Smith did not provide Mr. Sehmalhofer with a forwarding address at the time the lease expired, as required under 25 Del. C. § 5114(11). B. Under 25 Del. C. § 5301, Mr. Smith failed to meet his burden in proving that the Lease Agreement contains provisions that violate the LandIord-Tenant Code. Although Mr. Smith alleges in the Complaint that I\/Ir. Schmalhofer violated Delaware’s Landlord-Tenant Code by including illegal provisions in the Lease Agreenieiit, Mr. Smith failed to present any evidence at trial to support that elaim. l`n fact, the record is void of any reference to specific provisions of the Laiidlord-"l"enaiit Code on behalf of Mr. Smith, with the exception of Mr. Smith’s counsel’s argument to the present motion. Therefore, l\/lr. Smith has failed to meet his burden in proving that the Lease Agreement contains provisions in violation of the Landlord- Tenant Code. The Court also finds by a preponderance of the evidence in considering Defendant’s Motion for Directed Verdict that all eight (8) grounds in his Motion are rneritorious. ()PINION AND ORI)ER The Court therefore enters a partial directed verdict in accordance with Court ofConzri/zon Plecz.s‘e Cz`i>il Rule 50 in favor of l\/lr. Schmalhofer for Mr. Smith’s failure to meet his burden of proof in estabiisliing that he is entitled to damages in the amount of double the security deposit pursuant to 25 Del. C. § 55l4 eli .s'eq., and in establishing that the Lease Agreenient contains provisions that violate the Landlord-Teriant Code. The Court notes that l\/Ir. Schmalhofei' filed a supersedeas bond in this Court to stay the execution of the judgment below. 'l`hat Stay is now lifted and the $727.18 in damages shall be re~set for trial at the earliest convenience of the Court and counsel. The Court Denies the Directed Verdict on this sum certain. 1T ls so onl)nnnl) this 18‘ day @foci@b@r, 2014. w John K. Welch, Judge /jb cc: l\/ls. Tarnu White, Civii Supervisor, CCP